The Truth About The “Audit The Fed” Bill

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I have had an amazing look into the paradigm of institutionalization ever since I began speaking negatively about the actions of Congressman Ron Paul. Out of the woodwork they came; people whom, without reason or rational thought, defend the career of one Dr. Ron Paul without prejudice or fact. And though I make every attempt to not attack Ron Paul in a personal way, only referring to his political motives and actions, and though I list him as someone I want on my own dream-team cabinet if I were elected President of this gigantic corporate structure called the United States… those people who refuse to see anything but the mature, angelic doctor guided by the hand of Jesus himself as presented in the propaganda images that have inundated the Ron Paul campaign have certainly attacked me.

I was and still am being taken by surprise by these ad hominem attacks on my personal character, the Strawman arguments regarding this virtually mythical man, the appeals to novelty, pity, and popularity regarding his campaign and the so-called “blackout” of it in the media, and the constant divergent red herrings that always lead to an emotionally fueled debate down a road other than the acknowledgment of the facts at hand. These fallacies have taken hold of otherwise logical folks and cleared the logic centers of their brains.

Of course, at no time has there been this kind of response from anyone who isn’t a Ron Paul supporter, which again leads me to the only reasonable comparison: Obama supporters – who are equally unable to ingest facts about their chosen candidate due to the prophet-like pedestal that Obama has been set upon by themselves.

Further research has now lead me to take upon myself more of this burden of personal attack by taking a closer examination of the Ron Paul “HR 459, The Audit the Fed Bill to the 112^th Congress“, as described on Paul’s website.

Interesting to note here is that according to Ron Paul’s congressional (.gov) website, this bill’s predecessor:

“HR 1207 garnered broad bi-partisan support with 320 cosponsors in the 111^th Congress, and was attached (but removed in conference) as an amendment to the Dodd-Frank Financial Reform Bill“.

(Source: http://paul.house.gov/index.php?option=com_content&view=article&id=1822:audit-the-fed-reintroduced&catid=63:2011-press-releases)

This is especially confounding to me as this would have meant that this “Audit the Fed” bill had enough votes through its co-sponsors (320) to pass in congress as its own free-standing bill, among the 435 congress-people that would have voted on this bill. A simple majority of 218 votes would have passed this bill. And so the question of why this perfectly stable bill was attached to another bill instead as an amendment to that bill, where it could then be swatted away like a pesky fly, comes into question.

What did Congressman Paul have to say about this on the same (.gov) website?

“I was very pleased that so many of my colleagues were willing to stand up for transparency and accountability in government by cosponsoring HR 1207 in the last Congress.  I am optimistic about our prospects for a full and complete audit in the 112^th Congress,” stated Congressman Paul.

In short, this was a colossal fail on the part of Ron Paul, allowing this bill to be arbitrarily removed from the law-books by allowing it to be transformed into an amendment instead of a bill! Whether or not this was a purposeful and preconceived failure is a question that I am not qualified to answer. But I will state that I believe this to be highly suspicious behavior for a bill that would otherwise be a sure thing.

It is also interesting to note that Ron Paul has sponsored another bill for this years session, H.R. 1496: Federal Reserve Transparency Act, 112^th Congress: 2011-2012. Though this bill is identical to H.R. 459 except for the last paragraph, this bill has no co-sponsors whatsoever. What is most important to understand though is this statement, which is the description of the bill and what it strives to accomplish:

“To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.”

(Source: http://www.govtrack.us/congress/bill.xpd?bill=h112-1496)

Sometimes we miss the most important things when we read them. Here it states “…the Board of Governors of the Federal Reserve System is audited…“. This tells us that the Board is already, in fact, audited. It also states that the goal of this bill is “…to reform the manner in which…” that already existing audit is reported to Congress.

In fact, the Federal Reserve Act, which is of course codified into U.S. (Federal) CODE, (12USC 225b) states clearly that this audit already exists:

Section 2B. Appearances Before and Reports to the Congress

(b) Congressional report. The Board shall, concurrent with each semi-annual hearing required by this section, submit a written report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking and Financial Services of the House of Representatives, containing a discussion of the conduct of monetary policy and economic developments and prospects for the future, taking into account past and prospective developments in employment, unemployment, production,investment, real income, productivity, exchange rates, international trade and payments, and prices.

[12 USC 225b. As added by act of Dec. 27, 2000 (114 Stat. 3028).]

(c) Public access to information. The Board shall place on its home Internet website, a link entitled `Audit‘, which shall link to a web page that shall serve as a repository of information made available to the public for a reasonable period of time, not less than 6 months following the date of release of the relevant information, including–

1. the reports prepared by the Comptroller General under section 714 of title 31, United States Code; (Note: This is the only thing that is amended by the “Audit The Fed” bill.)
2. the annual financial statements prepared by an independent auditor for the Board in accordance with section 11B; (Note: This is, in fact, the Comprehensive Annual Financial Report (CAFR), the actual audit of the Federal Reserve.)
3. the reports to the Committee on Banking, Housing, and Urban Affairs of the Senate required under section 13(3) (relating to emergency lending authority); and
4. such other information as the Board reasonably believes is necessary or helpful to the public in understanding the accounting, financial reporting, and internal controls of the Board and the Federal reserve banks.

[12 USC 225b. As added by act of July 21, 2010 (124 Stat. 2118).]

And so we can see that the CAFR, which is the over 500 page audit of the Federal Reserve, is readily available to the public for its consumption. So it is, in this author’s opinion, safe to assume that the men and women of Congress, including Dr. Ron Paul, absolutely have access to this audit.

The real question that must be asked here is whether or not the Congress is actually allowed to take the audited financial information reported in the CAFR reports into consideration regarding its day to day legislation and budget, since it is not specifically mandated to be given as evidence to the Congress itself.

Just as every local, county, and state government prepares its financial measures and budgetary requirements for the people and their governance through the carefully selected portion of their Comprehensive Annual Financial Reports, which they call the “budget report”, is this also how Congress operates? Does Congress also receive a hand selected budget report for which it must operate under, not being allowed to take into consideration what is reported in the Comprehensive Audit of government as printed in the CAFR (fund investments, real estate investments, foreign currency and precious metals holdings, securities, and so much more)?

This would finally make the whole shell-game make sense!

If the Congress is not allowed to take the CAFR (audit) into consideration, and indeed only legislates through a limited and hand selected budget report that excludes the majority of liquid assets held by the Federal Government and funneled out of the taxpayer base into 1000’s of various investment funds and portfolios, then we can finally understand why our Congress can never create a balanced budget! And perhaps we can then begin to understand why Congressman Ron Paul does not talk about the Comprehensive Annual Financial Report for government and its Federal Reserve Bank in any public forums, including within the halls of Congress.

A closer look at H.B. 459 reveals a startling conclusion… This bill does not create an audit of the Federal Reserve. That audit already exists, according to the writing of H.B. 459 itself, as well as its senate counterpart, S.202, sponsored by who else but Ron Paul’s son, Rand Paul, who was recently elected to the Senate.

In fact, the bill only refers to the Comptroller General under U.S.CODE, deleting only a few restrictions for what the comptroller general may audit from the Federal Reserve. This in no way creates a new audit or changes the current audit, or the CAFR.

Amazingly, while these cuts are not bad things by any means, the paragraph in H.B. 459 states the following:

(c) Repeal of Certain Limitations- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after ‘in writing.’.

(d) Technical and Conforming Amendment- Section 714 of title 31, United States Code, is amended by striking subsection (f).

Interestingly, it seems that subsection (f) has already been stricken, making paragraph (d) of these “Audit the Fed” bills redundant. However, in Ron Paul’s new bill H.B. 1496 – the one with no co-sponsors – this problem is addressed (see link above).

When we go to the U.S.CODE and read Section 714 of TITLE 31, we find the following:

(b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing. Audits of the Board and Federal reserve banks may not include—

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;

(3) transactions made under the direction of the Federal Open Market Committee; or

(4) a part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.

So this entire subsection will be amended to read as the following:

(b) Under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an onsite examination of an open insured bank or bank holding company only if the appropriate agency has consented in writing.

Now, so that we are clear here… if the Federal Reserve Bank is allowed to retain the power of consent regarding which banks or bank holding companies that the Comptroller General is able to audit, then this whole paragraph is completely worthless. And the 4 subsections that are being cut out of this portion of this “Audit” bill might as well stay in the bill, for the Federal Reserve retains the power after amendment to simply say no!

Only if H.B. 459, s.202, and H.B. 1496, which are almost identical bills and are identical regarding this amendment… only if these bills were to have cut out the statement “only if the appropriate agency has consented in writing” would they actually accomplish any significant change in the accounting and auditing structure afforded in this CODE. In other words, this is a complete fail once again for Ron Paul, and now for his son. Once again, I cannot say for certain whether or not this colossal mistake was purposeful or not, but I must state with perfect clarity that I am starting to believethat there is a devious and purposeful betrayal here, using the lack of careful examination of the very supporters of this bill and the bill’s blatantly misleading semantics to fool Ron Paul’s fans into thinking this bill will do anything at all to change the auditing that already exists within the Comptroller General’s office.

In effect, these bills do absolutely nothing. And I find that highly suspicious and deeply concerning.

If, after reading this article and checking the provided sources and the U.S.CODE itself, you do not come to the same conclusion that I have here today, then I must admit that I am deeply concerned for my America and in the ability for its people to think for themselves.

And so, once again, I sight this research as just one of the reasons that I am running for President of the United States.

Let the insults and fallacies begin!

Please comment below…

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–Clint Richardson (realitybloger.wordpress.com)
–Wednesday, November 16, 2011

Posted by realitybloger on November 17, 2011

https://realitybloger.wordpress.com/2011/11/17/the-truth-about-the-audit-the-fed-bill/